AI-assisted research summary: This provision defines key interest-rate terms and sets rules for how prescribed interest rates are calculated.
1. (1) In this section, “adjustment date” means January 1, April 1, July 1 or October 1; (“date de rajustement”) “average prime rate”, on a particular date, means the mean, rounded to the nearest whole percentage point, of the annual rates of interest announced by each of the Royal Bank of Canada, The Bank of Nova Scotia, the Canadian Imperial Bank of Commerce, the Bank of Montreal and The Toronto-Dominion Bank to be its prime or reference rate of interest in effect on that date for determining interest rates on Canadian dollar commercial loans by that bank in Canada. O. Reg. 310/97, s. 1 (1). (“taux préférentiel moyen”) (2) For the purposes of the Act, the prescribed rates of interest shall be determined in accordance with the following rules: 1. A base rate of interest shall be determined for January 1, 1997 and for each adjustment date after January 1, 1997 and shall be equal to the average prime rate on, i. October 15 of the previous year, if the adjustment date is January 1, ii. January 15 of the same year, if the adjustment date is April 1, iii. April 15 of the same year, if the adjustment date is July 1, and iv. July 15 of the same year, if the adjustment date is October 1. 2. The base rate of interest in effect on a particular date shall be, i. the base rate for the particular date, if the particular date is an adjustment date, and ii. the base rate for the last adjustment date before the particular date, otherwise. 3. The prescribed rate of interest payable by a person under the Act in respect of a particular day shall be an annual interest rate that is three percentage points higher than the base rate of interest in effect on that day. 4. The prescribed rate of interest to be paid or allowed by the Minister to a person under the Act, in respect of a particular day before July 1, 2006, shall be an annual interest rate that is two percentage points lower than the base rate of interest in effect for that day. 4.1 The prescribed rate of interest to be paid or allowed by the Minister to a person under the Act, in respect of a particular day after June 30, 2006, shall be an annual interest rate that is three percentage points lower than the base rate of interest in effect for that day. 5. For an overpayment that results from a decision of the Minister or a court on an objection to, or an appeal from, an assessment or a statement of disallowance, the prescribed rate of interest to be paid or allowed by the Minister in respect of a particular day after December 31, 1998 is the base rate of interest in effect for that day. O. Reg. 310/97, s. 1 (2); O. Reg. 453/99, s. 1; O. Reg. 220/06, s. 1.